American Coatings Association

ACA Submits Feedback to DOC on Regulatory Streamlining

federal priorities

On March 31, ACA submitted detailed feedback to the U.S. Department of Commerce (DOC), responding to a request for information (RFI) about the impact of federal permitting regulations and general regulations on U.S. manufacturers to streamline federal permitting processes for domestic manufacturing and to reduce regulatory burdens affecting domestic manufacturers.

DOC’s RFI stemmed from President Trump’s Memorandum, “Streamlining Permitting and Reducing Regulatory Burdens for Domestic Manufacturing,” issued on Jan. 24, 2017, as well as his Feb. 24-issued Executive Order, “Enforcing the Regulatory Reform Agenda.” The executive order directs federal executive agencies to designate an agency official as its Regulatory Reform Officer (RRO). The order mandates each RRO to oversee the implementation of regulatory reform initiatives and policies to ensure that agencies effectively carry out regulatory reforms, consistent with applicable law.

In its feedback, ACA underscored that coatings manufacturing facilities are subject to various regulatory permits including air emissions, storm water pollution prevention, waste generation/disposal and hazardous materials transportation. In addition to these permits, there are a multitude of reporting requirements under the Clean Air Act, Occupational Safety and Health Act, and other regulatory programs that increase the time and resources that must be dedicated to “regulatory compliance.”

Many paint and coatings facilities are subject to Title V permitting requirements under the Clean Air Act. While the permits are federally enforceable, the actual permit is usually issued by the state environmental agency where the facility is located. ACA stressed that the permit process is often very cumbersome and slow, though some state agencies are more efficient than others. Sometimes it takes over a year to for permit approval, renewal, or modification, but ACA suggested improving the processing by reducing the frequency of air emissions reports.

ACA pointed out that many facilities are required to report emissions status quarterly and then also submit their annual emissions reports. A reduction in the frequency of emissions reporting for long-standing facilities in which the emissions have not changed substantially over the years should be implemented. In addition, ACA suggested that EPA should create incentives for lowering emissions, such as reduced reporting or reduced filing fees or tax breaks for reductions in overall emissions, which would lead to improved environmental stewardship.

ACA also responded to DOC’s request for feedback on the “Top 4” regulations most burdensome to the industry. Although there are many regulations that impose significant tangible and intangible costs on our manufacturers, the following addresses the most costly and difficult.

The 8-Hour Ozone Standard, EPA–HQ–OAR–2008–0699

In October 2015, EPA lowered the National Ozone Standard from 0.75 parts per million (ppm) to 0.70 ppm. However, ACA emphasized that EPA’s final rule on the ozone standard is forcing a significant number of states that are currently “in attainment” to “non-attainment” status, triggering a requirement to revise their State Implementation Plans and adopt even stricter volatile organic compound (VOC) emission regulations for coatings. This triggering event is being realized as ozone monitors across the country are demonstrating a marked improvement in air quality under the 2008 standard of 0.75 ppm.

ACA proffered a two-step solution to this problem: 1) EPA should revert to the 2008 standard of 0.75 ppm and fully implement this standard so that the forward progress already achieved can be extended without unnecessarily burdening the paint industry with increased standards and costs for many years to come; and 2) EPA should amend the Clean Air Act Regulations to extend the time for review of the ozone standard to every 10 years. Currently the Act requires a review every five (5) years. ACA noted that extending the review of the ozone standard to every 10 years will allow for more stability in the marketplace for formulators while still protecting human health and the environment.

Improved Tracking of Workplace Injuries and Illnesses, OSHA-2013-0023
The U.S. Occupational Safety & Health Administration (OSHA) issued its final rule “Improve Tracking of Workplace Injuries and Illnesses” on May 11, 2016. The purpose of the rule is to have certain injury and illness data that companies already collect reported electronically by July 1, 2017. OSHA plans to post the injury and illness data it receives from employers on a public website. OSHA’s rationale is that this action will encourage employers to provide a safer workplace since their data will be published on the OSHA website and compared to other companies and industries.

However, coatings manufacturers are greatly concerned with what OSHA plans to do with the illness and injury data submitted to the agency. The creation of a public website where OSHA will list industries and companies and their injury/illness data could potentially mislead the public since the information will be posted without context, and injury/illness data does not necessarily indicate a higher level of safety. More importantly, companies are concerned that their employee incentive programs and drug testing policies will be threatened since OSHA could consider some incentive programs and drug testing policies to “deter or discourage” employee reporting.

ACA estimates the cost of the rule to translate to $4.6 million for the paint and coatings industry, and maintains that OSHA should withdraw the final rule, or at a minimum, OSHA should withdraw the “anti-retaliation” provisions of the final rule.

“Once-in, Always-in” Policy Under National Emissions Standards for Hazardous Air Pollutants for Source Categories

This “regulation” is a May 16, 1995 EPA memorandum titled, “Potential to Emit for MACT Standards – Guidance on Timing Issues,” from John Seitz, Director, Office of Air Quality Planning and Standards (OAQPS), to Regional Air Division Directors — commonly known as the “Once in, Always in” memo.

EPA defines a “major source” as a source that has the potential to emit (PTE) hazardous air pollutants (HAP) up to 10 tons per year (tpy) of any single HAP or 25 tpy of any combination of HAPs. Sources below this threshold are considered “area sources.” Under the “once in, always in” policy, a major source may become an area source by limiting its PTE HAP to below the major source thresholds by no later than the first compliance deadline listed under the applicable Maximum Achievable Control Technology (MACT) standard (also referred to as National Emission Standards for Hazardous Air Pollutants or NESHAP). However, a source that fails to achieve area source status by the first MACT compliance deadline must remain subject to the MACT even if, at a later date, it subsequently reduces HAP emissions below major source levels. In other words, sources will always be subject to the MACT rules, regardless of whether the source is no longer a major source of HAP.

ACA strongly believes that EPA should withdraw or rescind the “Once-in, Always-in” policy.

This “policy” or “guidance” that has been applied by EPA as a “rule” has binding effects on the regulated community, including very burdensome compliance costs. The resources spent on compliance could be used instead for R&D, or modernization activities. While many coating and resin manufacturing operations could reduce emissions prior to the first compliance date of the Miscellaneous Coatings Manufacturing (MCM) and Miscellaneous Organic Chemical Manufacturing (MON) rules, other facilities could not. Those facilities that could not reduce their emissions have since installed thermal oxidation units, at tremendous cost.

ACA believes the policy also acts as a disincentive for industry, since facilities have no incentive to voluntarily reduce HAP emissions below major source thresholds. In fact, many facilities subject to the MCM and MON MACTs are now “area source” facilities, but they still must comply with the MCM requirements even though they are not major source facilities.

TSCA Nanomaterials Reporting Rule, EPA-HQ-OPPT-2010-0572

EPA’s “Chemical Substances When Manufactured or Processed as Nanoscale Materials; TSCA Reporting and Recordkeeping Requirements – Final Rule” was published on Jan. 12, 2017.

The final nano-reporting rule requires a one-time reporting and recordkeeping of existing exposure and health and safety information on nanoscale chemical substances in commerce. This rule requires companies that manufacture (including importing) or process certain chemical substances already in commerce as nanoscale materials notify EPA of certain information, including specific chemical identity; production volume; methods of manufacture; processing, use, exposure, and release information; and available health and safety data, to file nanomaterial reports on May 12, 2018.

In its feedback to DOC, ACA underscored that nanoscale materials, which may be incorporated into paint products would not be available since they would be bound in the dry coating film. Further, the use of emulsion polymers and the milling of pigments during the coating manufacturing process could fall below the 100 nanometers threshold and potentially trigger reporting under the final rule. Emulsion polymers and milling processes have been conducted for decades in the industry, and there is minimal opportunity for exposure to the nanoscale material after the film cures. Given the low exposure and low risk of these applications, ACA argues that EPA should exempt these substances from the reporting requirements. Existing federal information and regulatory programs for these substances provide adequate safety standards.

While there are likely, 10 to 15 coatings companies that will be required to report under this rule, the requirement alone could cost the industry up to $1.5 million.

In its feedback, ACA encouraged a comprehensive discussion and reform of the reporting requirements that are mandated under the Title V permits so that redundant reporting is eliminated, and asked for reform efforts on the four regulations its believes impose excessive costs on the coatings industry with very little environmental or public health benefit.

Contact ACA’s Heidi McAuliffe for more information.